Hitachi Construction Machinery - PDF by yth12061

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									Hitachi Construction Machinery Co., Ltd.

                                     esults
                          Financial Results for the
                  First Quarter Ended June 30, 2009




    (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
Consolidated Financial Results for the First Quarter Ended June 30, 2009
                                                                                                                                   July 27, 2009
Listed company: Hitachi Construction Machinery Co., Ltd. (HCM)
Stock exchange: Tokyo, Osaka (first section); Code number: 6305
URL http://www.hitachi-c-m.com/
Representative: Michijiro Kikawa, President and Chief Executive Officer
Scheduled date for submission of the Quarterly Securities Report: August 6, 2009
U.S. Accounting Standards are not applied.

1. Consolidated results for the first quarter ended June 2009 (April 1, 2009 to June 30, 2009)
(1) Consolidated results                                                       (Rounded off to the nearest million)

                               Net sales                  Operating income                     Ordinary income                       Net income
                       Millions of yen            %      Millions of yen               %     Millions of yen          %         Millions of yen             %
June 30, 2009                  132,302       (43.4)               (2,438)              ―            (4,098)           ―                 (8,590)           ―
June 30, 2008                  233,881            ―               24,352               ―           26,994             ―                 12,520            ―

                                                  Net income per share
                      Net income per share
                                                        (Diluted)
                                         Yen                        Yen
June 30, 2009                  (41.64)                     ―
June 30, 2008                   58.54                   58.44
  Note: The percentages indicated are increases (decreases) compared with the same period of the previous fiscal year.

(2) Consolidated financial position
                                 Total assets                             Net assets                      Equity ratio               Net assets per share
                                   Millions of yen                           Millions of yen                              %                           Yen
 June 30, 2009                          806,297                      322,308                                          35.3                   1,379.52
 March 31, 2009                         841,353                      331,015                                          34.9                   1,422.54
Note: Total equity at the fiscal period end
            June 2009: ¥284,572 million        March 2009: ¥293,446 million
2.   Dividends status
                                                                             Cash dividends per share
                                                                                                                              Total cash dividends per
                                  First Quarter         Second Quarter           Third Quarter            Year end
                                                                                                                              share for the fiscal year
                                                             Yen                       Yen                  Yen                            Yen
 March 31, 2009                        ―                     22.00                     ―                    22.00                      44.00
 March 31, 2010 (Result)               ―
                                                                                                                                       10.00
                (Projection)                                   5.00                     ―                      5.00
Note: Changes involving the dividend states for the fiscal year ending March 2010: None

3.   Projected consolidated results for the fiscal year ending March 2010 (April 1, 2009 to March 31, 2010)
                                            Net sales               Operating income          Ordinary income
                                                Millions of yen             %      Millions of yen         %             Millions of yen          %
 September 30, 2009 (Interim)                         270,000         (40.5)                      0              ―              (5,500)         ―
 March 31, 2010                                       590,000         (20.7)                 24,000         (50.9)              15,600       (67.4)


                                                   Net income                      Net income per share
                                                Millions of yen             %                               Yen
 September 30, 2009 (Interim)                          (8,500)             ―                           (41.21)
 March 31, 2010                                        5,000          (72.6)                            24.24
Notes:
 1) The percentages indicated show changes from the same period of the previous fiscal year.
 2) Changes in the projected consolidated results for the fiscal year ending March 2010: Yes




            (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                  1
4. Others
(1) Significant changes involving subsidiaries during the period (changes involving specific subsidiaries
    accompanying changes in the scope of consolidation): None
(2) Simple accounting procedures and the application of special accounting procedures for the compilation of
    quarterly consolidated financial statements: Yes
    Note: For detailed information, please refer to Qualitative Information and Financial Statements, 4.Others, on page 9.
(3) Changes in accounting principles, procedures, and presentation methods used in the preparation of quarterly
    consolidated financial statements.
      A. Changes in response to accounting standard revisions: None
      B. Changes other than those in (A): None

(4) Number of shares issued (common shares)
      [1] Number of shares issued at the end of the period (including treasury shares)
                June 2009: 215,115,038              March 2009: 215,115,038
      [2] Number of treasury shares at the end of the period
                June 2009: 8,832,211                March 2009: 8,831,203
      [3] Average number of shares during the period
                June 2009: 206,283,437              June 2008: 213,868,992



  Note: Explanation on the appropriate use of results forecasts and other important items

    Any forward-looking statements in the report, including results and forecasts, are based on certain assumptions that were deemed rational as
    well as information currently available to the Company at this time. However, various factors could cause the actual results to differ materially.
    For details such as assumptions for results forecasts and note, etc., please refer to Qualitative Information and Financial Statements, 3.
    Qualitative Information concerning Consolidated Results Forecasts, on page 8.




              (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                    2
 Qualitative Information and Financial Statements

 1. Qualitative Information concerning Consolidated Business Performance

[1] Overview of the Market Conditions during the First Quarter Ended June 30, 2009
  During the consolidated first quarter under review (April 2009 to June 2009), though the
  economic outlook suggests that the global economy is partly bottoming out, as a whole,
  business conditions surrounding the HCM Group are still severe.
   With respect to demand for construction machinery, it fell far short of our assumption
  especially in advanced nations such as Japan, the United States, and Europe. In emerging
  countries, demand in China and some Southeast nations began trending upward, while in
  other emerging countries, demand remained in difficult circumstances owing to money
  tightening and decline in private capital investment.
   Under these circumstances, the HCM Group focused on maintaining stocks at an appropriate
  level, curbing and reducing material costs and fixed costs, and increasing the market share to
  improve sales and profits. As a result of these measures, in terms of consolidated results for
  the first quarter under review, we suffered a dramatic decrease in demand especially in Japan,
  the United States, and Europe, as well as in emerging nations where the ratio to sales is
  expanding.
    The following table summarizes the consolidated results for the period:

                                                                                                 (100 million yen; %)

                                      June 2009               June 2008                Year-on-year change
                                         (A)                    (B)                (A) - (B)          (A)/(B)
        Net sales                      1,323                  2,339                  (1,016)              56.6 %
        Operating income                 (24)                  244                     (268)                -
        Ordinary income                  (41)                  270                     (311)                -
        Net income                       (86)                  125                     (211)                -
        Notes:
        1) Figures under ¥100 million are rounded off.
        2) The percentages indicated are the year-on-year changes compared with the same period of the previous fiscal year.


[2] Overview of Consolidated Sales by Regional Segment

 Japan
  The domestic economy remained in harsh condition due to ongoing curtailments in capital
  investments and a decline in personal spending, while the effect of supplementary budget has
  not yet become conspicuous.
   Owing to these factors, demand for construction machinery declined sharply compared with
  the previous fiscal year. Demand for new machinery for rental companies remained
  particularly sluggish, which was the one of the reasons for the drop in our consolidated sales.
   Given this situation, we are striving to strengthen our industry-specific sales in such sectors
  as forestry, steel & scrap, and resources, to meets our various customers’ needs in different
  fields, while focusing on high-demand areas.
    Also, we integrated the West and East Japan Division to establish the “Japan Business
  Division” as of April 1, 2009 to streamline the organization, responding to the shrinking


           (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                 3
 market and to reduce costs.
  As a result, net sales fell 30% from the same period of the previous fiscal year to ¥34,243
 million.

The Americas
 In the United States, housing-related indexes are not yet on a secure upward trend, with four
 straight quarters of falling GDP beginning from the quarter ended September 2008. It does
 not seem as if the economic stimulus package by the government has yet progressed much,
 and we can see no real signs of its effect so far.
  Under these conditions, demand for construction machinery continued to decline far behind
 our plan compared with the previous fiscal year.
  Consequently, net sales fell 59%, year on year, to ¥10,896 million.

Europe, Russia-CIS, Africa, and the Middle East
 [Europe]
 Owing to prolonged economic stagnation, demand in Europe for construction machinery fell
 sharply. Under these continuing severe circumstances, we tried to maintain stocks at an
 appropriate level, while strengthening sales promotion by such measures as demonstration,
 sales support for targeted products (wheel loaders and wheel-type hydraulic excavators) for
 dealers, and extension of the guarantee period, to expand sales and to explore new potential
 customers such as big rental companies.
  Nevertheless, net sales in Europe declined 60% year on year to ¥15,298 million.

  [Russia-CIS, Africa, and the Middle East]
 In Russia-CIS, the prices of crude oil and natural gas have been on a recovery track, in
 accordance with the stability of ruble and improvement of trade balance, increase in Forex
 reserves, etc.; the economic indicators are improving. Nonetheless, the financing situation for
 the users of construction machinery has not yet improved and demand for machinery
 remained weak because of conservative purchasing owing to anxiety over the future.
 Therefore, we continued to focus on maintaining stocks at an appropriate level.
  In Africa, mining-related demand, which had previously been steadily increasing, started to
 decline accompanying the decrease in demand for natural resources. In this severe condition,
 we further tried to expand sales and service in unexplored regions by opening new bases in
 Zambia and establishing the new dealer in Angola.
  Turning to the Middle East, demand for construction machinery declined sharply due to such
 factors as the prolonged recession in the highest-demand country, Turkey, and decrease in
 infrastructural investments and private capital investments caused by the credit crunch.
 Although private-sector demand remained sluggish, we actively tried to catch up with demand
 in Saudi Arabia, the steadily growing area, and to gain numerous orders through
 reconstruction measures in Iraq.
  The total net sales of Russia-CIS, Africa, and the Middle East regions fell 83% year on year,
 to ¥5,854 million.

 Asia and Oceania
 Although demand for palm oil and forestry in Malaysia and Indonesia has been on a recovery
 track, demand as a total for construction machinery declined because of the global financial


         (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                               4
 crisis.
   Furthermore, mining machinery-related demand in Australia and Indonesia declined owing
 to the decrease in the prices of resources. In the near future, we will make sure to catch orders
 from infrastructural projects that will be conducted in Asian nations as economic stimulus
 packages, while expanding our sales network in each company.
  As a result, net sales in Asia and Oceania declined 31% year on year to ¥ 31,639 million.

China
 In China, demand for construction machinery has been significantly on a recovery track in the
 coastal and mining areas followed by the internal area, due to the front-loading of public
 works, the effect of 4-trillion-RMB stimulus packages and active investments in fixed assets
 such as transportation, mining, and quarry.
   Under these circumstances, we set up a special department for large infrastructural projects
 to catch up with the demand for stimulus packages. And also, we conducted promotional
 activities such as exhibitions in each region, dispatch of special teams to areas where demand
 is high and our market share is low to support and enhance the dealers, flexible financing
 menus for customers, etc, to expand our market share.
  Net sales in China declined 14% year on year to ¥34,372 million.

  The following table summarizes consolidated net sales by geographic area:

Consolidated Net Sales by Geographic Area                                                    (Millions of yen)


                             First Quarter ended            First Quarter ended             Increase (Decrease)
                                June 30, 2009                  June 30, 2008


                                        Proportion                      Proportion        Amount of       %
                           Net sales                      Net sales
                                           (%)                             (%)             change       change
   The Americas                10,896               8.2        26,916              11.5      (16,020)       (59.5)


       Europe                  15,298              11.6        38,361              16.4      (23,063)       (60.1)

     Russia-CIS, Africa,
                                5,854               4.4        33,556              14.3      (27,702)       (82.6)
     and the Middle East
  Europe, Russia-CIS,
 Africa, and the Middle        21,152              16.0        71,917              30.7      (50,765)       (70.6)
          East
   Asia and Oceania            31,639              23.9        45,900              19.7      (14,261)       (31.1)

        China                  34,372              26.0        40,025              17.1       (5,653)       (14.1)

       Sub-total               98,059              74.1       184,758              79.0      (86,699)       (46.9)

        Japan                  34,243              25.9        49,123              21.0      (14,880)       (30.3)

         Total                132,302          100.0          233,881             100.0     (101,579)       (43.4)




         (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                               5
  [3] Overview of Consolidated Net Sales by Business Segment

(a) Construction Machinery Business
  Regarding construction-related machinery, in addition to expanding sales of the ZAXIS-3
  Series of hydraulic excavators and the ZW Series of wheel loaders which offer exceptional
  performance and low-fuel consumption, targeting the expected sluggish demand for new
  machinery, we strengthened our stock business, which includes sales of used machinery, parts
  and services, financing, and rental business.
   In machinery for resource development, we made efforts to expand sales of such products as
  the EX-6 Series of ultra-large hydraulic excavators as well as an electric-drive series of
  ultra-large hydraulic excavators and dump trucks, which realize high driving performance
  using an AC electric-drive system.
   As a result, net sales in the construction machinery business fell 43% from the same period
  of the previous fiscal year to ¥121,306 million.

 (b) Industrial Vehicles Business
 In industrial vehicles, we worked hard especially in the development of such new types of
 machines as battery forklifts for overseas and machines that meet Tier 3 Emission Control
 Regulations. However, demand for small- to mid-sized vehicles decreased sharply in most
 global areas, followed by the United States, Europe, and Russia-CIS, and we promptly started
 to reduce production volume and adjust stocks.
  Consolidated net sales in the industrial vehicles business decreased 49% from the same
 period of the previous year to ¥10,996 million.

2. Qualitative Information concerning Consolidated Financial Statements

 [1] Status of Assets, Liabilities, and Net Assets
 (a) Assets
 Current assets at the end of the first quarter under review amounted to ¥503,643 million, a
 decrease of ¥35,130 million, or 6.5%, from the previous fiscal year end. This was due mainly
 to respective decreases of ¥37,937 million in notes and accounts receivable, and ¥20,864
 million in inventories.
   Fixed assets increased ¥74 million from the end of the previous fiscal year to ¥302,654
 million.
 As a result, total assets decreased ¥35,056 million, or 4.2%, from the previous fiscal year end
 to ¥806,297 million.

 (b) Liabilities
 Current liabilities at the end of the first quarter amounted to ¥349,743 million, a decrease of
 ¥64,632 million, or 15.6%, from the previous fiscal year end. This was due mainly to a
 respective decrease of ¥34,571 million in notes and accounts payable and ¥23,727 million in
 short-term loans.
  Long-term liabilities increased ¥38,283 million, or 39.9%, from the previous fiscal year end
 to ¥134,246 million. This was due mainly to the issue of domestic corporate bonds amounting
 to ¥30 billion in June 2009.
  As a result, total liabilities decreased ¥26,349 million, or 5.2%, from the previous fiscal year


         (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                               6
end to ¥483,989 million.

 (c) Net Assets
 Net assets, including minority interests, decreased ¥8,707 million, or 2.6%, from the
 previous fiscal year end to ¥322,308 million. This was due mainly to a loss of ¥8,590 million
 in net income for the first quarter under review.

 [2] Status of Consolidated Cash Flows
 Cash and cash equivalents at end of period totaled ¥49,900 million, an increase of ¥9,796
 million from the end of the previous fiscal year. Factors relating to each cash flow category
 were as follows.

 (a) Cash Flows from Operating Activities
 Net cash provided by operating activities totaled ¥10,999 million, an increase of ¥3,599
 million compared with the first quarter of the previous fiscal year. Factors that increased
 cash included a decrease of ¥27,889 million in inventories, which was an improvement of
 ¥51,360 million compared with an increase of ¥23,471 million in inventories in the same
 period of the previous fiscal year. Factors that increased cash also included a decrease of
 ¥5,221 million in income taxes paid, a decrease of ¥15,179 million compared with that of
 ¥20,400 million in the previous first quarter.
  Conversely, factors that reduced cash included a deficit of ¥4,098 million in income before
 income taxes and minority interests owing to a decrease in sales, a difference of ¥30,950
 million compared with surplus of ¥26,852 million in the previous first quarter. Other factors
 included a decrease of ¥39,116 million in notes and accounts payable, a difference of
 ¥31,171 million compared with that of ¥7,945 million in the previous first quarter.

 (b) Cash Flows from Investing Activities
 Net cash used in investing activities was ¥4,521 million, a decrease of ¥12,961 million
 compared with ¥17,482 million in the previous first quarter. Key factors underlying this
 decrease included year on year changes in acquisitions of property, plant and equipment,
 which was ¥15,842 million in the previous first quarter, which consisted mainly of capital
 investment to respond to increased production at various manufacturing bases, and for the
 period under review, it was ¥5,433 million which was mainly from investment for renewal
 and rationalization.
  As a result, free cash flows, the sum of cash flows from operating activities and cash flows
 from investing activities amounted to an inflow of ¥6,478 million.

 (c) Cash Flows from Financing Activities
 Net cash provided by financing activities totaled ¥3,001 million.
 This was due mainly to the issuance of domestic five-year corporate bonds amounting to ¥30
 billion in June 2009 to adjust the ratio of long-term and short-term debt, and the appropriate
 amount was used to pay back the long-term and short-term debt.




        (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                              7
3. Qualitative Information concerning Consolidated Results Forecasts

    The outlook for consolidated results as of April 27, 2009 was estimated based on the global
  demand forecast for hydraulic excavators, which was 133,700 units for fiscal 2009.
    As of today, it is extremely difficult for us to predict the exact demand especially for the
  second half of the fiscal year. Recently, demand in China, Indonesia, Malaysia, etc. is
  returning to growth, which is increasing more than we expected, though we do not think that
  it will be able to compensate for the decline in Japan, the United States, and Europe with the
  increasing demand from those areas. Thus, our outlook for the global demand forecast for
  hydraulic excavators for fiscal year 2009 is changed to 120,600 units at this time.
     Given these factors, though the Group is curbing and reducing materials costs to the
  targeted level and commencing initiatives aimed at achieving further reductions in fixed
  costs while expanding our market share in each region worldwide, as of today we do not
  think that the effort will be able to compensate for decrease in sales associated with the
  demand which is behind our estimate, therefore, we have revised our previous earnings
  forecast for the fiscal year ending March 2010 that we announced on April 27, 2009 as
  indicated below.
                                                                                                                   (100 million; %)

                                       March 31, 2010                          Reference                       Change

                          As of July 27, 2009     As of April 27, 2009
                                                                            March 31, 2009          (A)-(B)          (A)/(B)(%)
                                  (A)                     (B)
  Net sales                      5,900                    6,200                  7,442               ( 300)              95.2
  Operating income                  240                     270                     488                 (30)             88.9
  Ordinary income                   156                     200                     478                 (44)             78.0
  Net income                         50                      70                     183                 (20)             71.4

  Notes:
   1) Figures under ¥100 million are rounded off.
   2) These projections assume an exchange rate of ¥95 to the U.S. dollar and ¥130 to the Euro.
   3) Forecasts, plans, and expectations regarding future performance contained in the aforementioned statements are
         based on information currently available and deemed rational by the Company management. However, as various
         factors could change the actual results, forecasts, plans, and expectations may differ. These factors are considered to
         include the economic conditions in principal markets and fluctuations in demand, fluctuations in exchange rates, and
         revisions to Japanese or international laws and regulations, accounting standards, practices, or other policies.




           (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                 8
4. Others

[1] Significant changes involving subsidiaries during the period (changes involving specific
subsidiaries accompanying changes in the scope of consolidation): None

[2] Simple accounting procedures and the application of special accounting procedures for the
compilation of quarterly consolidated financial statements

A. Method of evaluating inventory assets
   The value of inventories at the end of the quarter under review is calculated using a rational
   method, based on physical inventories at the end of the previous fiscal year, rather than
   physical inventories at the end of the quarter under review.
B. Method of calculating depreciation of fixed assets
   Projected annual depreciation incorporating estimates of anticipated acquisition, sale, and
   disposal of fixed assets throughout the year is allocated proportionally to the quarter.
    Depreciation costs for assets using the declining-balance method are calculated by
   allocating depreciation costs for the consolidated fiscal proportionally to the quarter.
C. Method of calculating the estimated loan loss value for general loans
   In calculating the estimated loan loss value for general loans at the end of the first quarter,
   except in the case where a noteworthy change in the loan loss rate is recognized, the loan loss
   rate at the end of the previous fiscal year is employed.
D. Method of calculating deferred tax assets and liabilities
   Collectability of deferred tax assets is reviewed using available information as of closing. If
   there are no material changes in business or in temporary differences, we use the same
   business forecast or tax planning as at the previous year end.
   If there are material changes in business or in temporary differences, we use the same
   business forecast or tax planning as at the previous year end adding the effect of the changes.
E. Standard used to calculate income taxes
   Tax expenses are calculated by making a reasonable estimation of the effective tax rate on
   income before income taxes and minority interests for the fiscal year including the first
   quarter after the application of deferred tax accounting and applying the estimated effective
   tax rate to quarterly income before income taxes and minority interests. But if this results in
   lack of reasonableness, we use the effective tax rate.
[3] Changes in accounting principles, procedures, and presentation methods used in the
preparation of quarterly consolidated financial statements.

A. Changes in response to accounting standard revisions: None

B. Changes other than those in (A): None




          (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                9
5. Consolidated Financial Statements
(1) Consolidated Balance Sheets                                                                                             (Millions of yen)
                                                                          First-Quarter        Previous year-end
                                                                              As of                  As of                    (A)-(B)
                                                                        Jun. 30, 2009 (A)       Mar. 31, 2009 (B)

ASSETS
   Current assets
       Cash and bank deposits                                                      43,664                 40,109                     3,555
       Notes and accounts receivable                                             137,917                 175,854                  (37,937)
       Lease receivable                                                            41,102                 22,786                   18,316
       Finished goods and merchandise                                            175,339                 193,686                  (18,347)
       Work in process                                                             49,596                 50,512                        (916)
       Material and supplies                                                       22,513                 24,114                    (1,601)
       Others                                                                      40,556                 38,833                     1,723
       Less: Allowance for doubtful accounts                                       (7,044)                 (7,121)                       77
   Total current assets                                                          503,643                 538,773                  (35,130)


   Fixed assets
       Property, plant and equipment
            Property held for lease (net)                                          39,757                 41,474                    (1,717)
            Buildings and structures (net)                                         65,627                 66,198                        (571)
            Machinery, equipment and vehicles (net)                                48,652                 48,498                        154
            Land                                                                   56,709                 56,212                        497
            Construction in progress                                                8,072                   8,206                       (134)
            Tools, furniture and fixtures (net)                                     5,987                   6,374                       (387)
       Net property, plant and equipment                                         224,804                 226,962                    (2,158)


       Intangible assets
            Goodwill                                                                5,180                   5,373                       (193)
            Software                                                               19,431                 18,969                        462
            Others                                                                  1,852                   1,886                        (34)
       Total intangible assets                                                     26,463                 26,228                        235


       Investments and other assets
            Investments in securities                                              23,177                 21,504                     1,673
            Others                                                                 30,311                 29,884                        427
            Less: Allowance for doubtful accounts                                  (2,101)                 (1,998)                      (103)
       Total investments and other assets                                          51,387                 49,390                     1,997


   Total fixed assets                                                            302,654                 302,580                         74
Total assets                                                                     806,297                 841,353                  (35,056)
                                                                                                       (Rounded off to the nearest million)
     Notes: 1. Stated in order of the current first quarter and the previous year end.
            2. Increases and decreases are comparisons of the end of the current first quarter and the previous year end.




       (English translation of "KESSAN TANSHIN" originally issued in the Japanese language)
                                            10
                                                                                                                        (Millions of yen)
                                                                      First-Quarter        Previous year-end
                                                                          As of                  As of                    (A)-(B)
                                                                    Jun. 30, 2009 (A)       Mar. 31, 2009 (B)

LIABILITIES
    Current liabilities
        Notes and accounts payable                                             65,801                100,372                  (34,571)
        Short-term loans                                                     206,158                 229,885                  (23,727)
        Commercial paper                                                       10,000                   5,000                    5,000
        Current portion of bonds                                                  522                     500                        22
        Income taxes payable                                                    3,744                   5,970                   (2,226)
        Others                                                                 63,518                 72,648                    (9,130)
    Total current liabilities                                                349,743                 414,375                  (64,632)
    Long-term liabilities
        Bonds                                                                  31,790                   1,820                  29,970
        Long-term loans                                                        64,427                 63,421                     1,006
        Retirement and severance benefits                                      11,709                 11,698                         11
        Others                                                                 26,320                 19,024                     7,296
    Total long-term liabilities                                              134,246                  95,963                   38,283
    Total liabilities                                                        483,989                 510,338                  (26,349)
Net assets
    Shareholder's equity
        Common stock                                                           81,577                 81,577                          0
        Capital surplus                                                        81,084                 81,084                          0
        Retained earnings                                                    146,598                 159,726                  (13,128)
        Treasury stock                                                        (10,958)               (10,957)                        (1)
    Total shareholders' equity                                               298,301                 311,430                  (13,129)
    Valuation and translation adjustments
        Net unrealized gain (loss) on securities held                             867                    (124)                      991
        Gain (loss) on deferred hedge transactions                                241                    (129)                      370
        Foreign currency translation adjustments                              (14,837)               (17,731)                    2,894
    Total valuation and translation adjustments                               (13,729)               (17,984)                    4,255
    Stock purchase warrants                                                       816                     747                        69
    Minority interests                                                         36,920                 36,822                         98
    Total net assets                                                         322,308                 331,015                    (8,707)
Total liabilities and net assets                                             806,297                 841,353                  (35,056)
                                                                                                   (Rounded off to the nearest million)
 Notes: 1. Stated in order of the current first quarter and the previous year end.
        2. Increases and decreases are comparisons of the end of the current first quarter and the previous year end.




    (English translation of "KESSAN TANSHIN" originally issued in the Japanese language)
                                         11
(2) Consolidated Statements of Income                                                                                                    (Millions of yen)
                                                                                          First-Quarter               First-Quarter
                                                                                    Three months ended             Three months ended         (A)/(B)×100 (%)
                                                                                         Jun. 30, 2009 (A)          Jun. 30, 2008 (B)

                                                                                                                                                          %

Net sales                                                                                            132,302                    233,881                 57

Cost of sales                                                                                        106,671                    170,918                 62

Gross profit                                                                                          25,631                     62,963                 41

Selling, general and administrative expenses

        Packing and shipping expenses                                                                   2,028                      5,984                34

        Employees' salaries                                                                             9,492                    10,728                 88

        R&D expenditure                                                                                 2,995                      3,038                99

        Others                                                                                        13,554                     18,861                 72

Total selling, general and administrative expenses                                                    28,069                     38,611                 73

Operating income (loss)                                                                                (2,438)                   24,352                      -

Non-operating income

        Interest income                                                                                      528                   2,060                26

        Interest income from installment sales                                                                47                        280             17

        Dividends income                                                                                     22                         133             17

        Gain on equity earnings of affiliated companies                                                        0                        465                  -

        Effect of exchange rate changes                                                                      123                   1,049                12

        Others                                                                                          1,171                      1,735                67

Total non-operating income                                                                              1,891                      5,722                33

Non-operating expenses

        Interest expenses                                                                               1,781                      1,779               100

        loss on equity earnings of affiliated companies                                                      569                          0                  -

        Others                                                                                          1,201                      1,301                92

Total non-operating expenses                                                                            3,551                      3,080               115

Ordinary income (loss)                                                                                 (4,098)                   26,994                      -

Extraordinary losses

        Loss on evaluation of inventories                                                                      0                        142                  -

Total extraordinary losses                                                                                     0                        142                  -

Income (loss) before income taxes and minority interests                                               (4,098)                   26,852                      -

Income taxes                                                                                            3,347                    10,553                 32

Minority interests                                                                                      1,145                      3,779                30

Net income (loss)                                                                                      (8,590)                   12,520                      -
                                                                                                                   (Rounded off to the nearest million)
Notes: 1. Stated in order of the current first quarter and the previous first quarter.
       2. Stated as comparison with the previous first quarter.




          (English translation of "KESSAN TANSHIN" originally issued in the Japanese language)
                                               12
(3) Consolidated Statements of Cash Flows                                                                           (Millions of yen)
                                                                                        First-Quarter             First-Quarter
                                                                                     Three months ended        Three months ended
                                                                                        Jun. 30, 2009             Jun. 30, 2008

Cash flows from operating activities
 Income (loss) before income taxes and minority interests                                         (4,098)                   26,852
 Depreciation and amortization                                                                     8,596                     8,581
 Increase (decrease) in allowance for doubtful accounts                                             (108)                      124
 Interest and dividends income                                                                      (550)                   (2,193)
 Interest expenses                                                                                 1,781                     1,779
 Gain (loss) on equity earnings of affiliated companies                                              569                      (465)
 Increase (decrease) in notes and accounts receivable                                             39,740                    22,148
 Increase (decrease) in lease receivable                                                         (19,840)                         -
 Increase in inventories                                                                          27,889                   (23,471)
 Purchase of property held for lease                                                              (2,263)                   (2,408)
 Sales of property held for lease                                                                    977                       514
 Increase (decrease) in notes and accounts payable                                               (39,116)                   (7,945)
 Gain on sales of property, plant and equipment                                                     (841)                     (377)
 Loss on evaluation of securities                                                                      1                         0
 Other, net                                                                                        3,483                     4,661
     Sub-total                                                                                    16,220                    27,800
 Income taxes paid                                                                                (5,221)                  (20,400)
 Net cash provided by operating activities                                                        10,999                     7,400
Cash flows from investing activities
 Acquisitions of property, plant and equipment                                                    (5,433)                  (15,842)
 Purchase of intangible assets                                                                      (964)                   (1,844)
 Purchase of investments in securities                                                                (4)                   (2,461)
 Interest and dividends received                                                                     718                     2,038
 Dividends received from affiliated companies                                                        401                       509
 Other, net                                                                                          761                       118
 Net cash used in investing activities                                                            (4,521)                  (17,482)
Cash flows from financing activities
 Net increase (decrease) in short-term debt                                                      (19,939)                   10,576
 Proceeds from long-term debt                                                                      6,148                     2,538
 Repayments of long-term debt                                                                     (5,194)                   (3,622)
 Repayments of lease liabilities                                                                    (503)                         -
 Proceeds from issuance of bonds                                                                  29,865                         0
 Redemption of debentures                                                                             (8)                        0
 Interest paid                                                                                    (1,735)                   (2,176)
 Dividends paid to shareholders                                                                   (4,538)                   (4,705)
 Dividends paid to minority shareholders by subsidiaries                                          (1,094)                   (1,226)
 Proceeds from sale of treasury stock                                                                  0                        35
 Purchase of treasury stock                                                                           (1)                       (7)
 Net cash provided by financing activities                                                         3,001                     1,413
Effect of exchange rate changes on cash and cash equivalents                                         317                     1,977
Net increase (decrease) in cash and cash equivalents                                               9,796                    (6,692)
Cash and cash equivalents at beginning of year                                                    40,104                    68,726
Cash and cash equivalents at end of period                                                        49,900                    62,034
                                                                                                 (Rounded off to the nearest million)
Note: Stated in order of the current first quarter and the previous first quarter.




               (English translation of "KESSAN TANSHIN" originally issued in the Japanese language)
                                                    13
(4) Notes on the preconditions for a going concern: None

(5) Segment Information

A. Segment information by business category
   First Quarter ended June 30, 2009 (From April 1, 2009 to June 30, 2009)          (Millions of yen)
                                 Construction Industrial
                                                                           Elimination
                                  machinery      vehicles        Total                   Consolidated
                                                                           or corporate
                                   business      business

 Net Sales
 (1) Net sales to outside
                                               121,306           10,996          132,302                               132,302
 customers
 (2) Inter-segment
                                                       0                0                0                  0
 sales/transfers
 Total                                        121,306            10,996          132,302                    0          132,302

 Operating loss                                (1,842 )            (596)         (2,438 )                   0          (2,438 )
Notes:
1) Business categories are based on internal segments used within HCM.
2) The products included in each category are as follows
      1. Construction machinery business: Hydraulic excavators, mini-excavators, wheel loaders, and crawler cranes
      2. Industrial vehicles business: Forklifts, transfer cranes, and container carriers
3) Starting from the current fiscal year, we changed our segmentation to construction machinery business and industrial vehicles business. Because we
      absorbed our wholly owned subsidiary Hitachi Kenki Fine Tech Co., Ltd that was separately below mentioned as semiconductor production
      equipment business, through a merger in October 1, 2008. The purpose of this merger is to achieve greater efficiency in the electricity and
      electronic field by consolidating the high level of technology in the company.


   First Quarter ended June 30, 2008 (From April 1, 2008 to June 30, 2008)                                                       (Millions of yen)
                                                               Semiconductor
                                  Construction Industrial                                                            Elimination
                                                                 production
                                   machinery      vehicles                                             Total             or      Consolidated
                                                                 equipment
                                    business      business                                                            corporate
                                                                  business

  Net Sales
 (1) Net sales to
                                                211,910           21,698                     273        233,881                              233,881
 outside customers
 (2) Inter-segment
                                                        7                0                   368             375             (375)
 sales/transfers
 Total                                          211,917           21,698                     641        234,256              (375)           233,881

 Operating income                                23,664               675                     12         24,351                   1           24,352
Notes:
1) Business categories are based on internal segments used within HCM.
2) The products included in each category are as follows:
    1. Construction machinery business: Hydraulic excavators, mini-excavators, wheel loaders, and crawler cranes
    2. Industrial vehicles business: Forklifts, transfer cranes, and container carriers
    3. Semiconductor production equipment business: Ultrasonic inspection video equipment and atomic force microscope equipment




                  (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                       14
B. Segment information by area
First Quarter ended June 30, 2009 (From April 1, 2009 to June 30, 2009)                                        (Millions of yen)

                                                                       The                            Elimination
                               Japan         Asia        Europe                   Others    Total                  Consolidated
                                                                     Americas                         or corporate


 Net sales
 (1) Net sales to
                                 46,633       44,342       17,695         7,216    16,416   132,302                      132,302
 outside customers
 (2) Inter-segment
                                 14,443        3,023            58        3,783      201     21,508       (21,508)
 sales/transfers
 Total                           61,076       47,365       17,753        10,999    16,617   153,810       (21,508)       132,302

 Operating
                               (13,356)        7,052          537          494      1,087   (4,186)         1,748         (2,438)
 income (loss)


First Quarter ended June 30, 2008 (From April 1, 2008 to June 30, 2008)                                        (Millions of yen)

                                                                       The                            Elimination
                               Japan         Asia        Europe                   Others    Total                  Consolidated
                                                                     Americas                         or corporate


 Net sales
 (1) Net sales to
                                 82,519       48,758       55,138        18,144    29,322   233,881                      233,881
 outside customers
 (2) Inter-segment
                                 83,583        8,045        5,492         4,442       24    101,586      (101,586)
 sales/transfers
 Total                         166,102        56,803       60,630        22,586    29,346   335,467      (101,586)       233,881

 Operating income                 8,615        8,212        3,798         1,356     2,650    24,631          (279)        24,352
Note:
1) National and regional categories are based on geographic proximity.
2) Countries included in each segment are as follows:
        1. Asia: China, Indonesia, Singapore, Thailand, and Malaysia
        2. Europe: Holland, France, and the United Kingdom
        3. The Americas: The United States and Canada
        4. Other: Australia, New Zealand, and South Africa




                  (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                       15
C. Overseas sales                                                                    (Millions of yen)
                                       First quarter ended                 First quarter ended
                                         June 30, 2009                       June 30, 2008
                                                      Percentage of                      Percentage of
                                                         sales in                           sales in
                                       Sales          consolidated
                                                                           Sales         consolidated
                                                          sales                              sales

The Americas                            10,896           8.2%              26,916         11.5%
Europe, Africa, & the
                                        21,152            16.0             71,917            30.7
Middle East
Asia & Oceania                          31,639            23.9             45,900            19.7
China                                   34,372            26.0             40,025            17.1
Total overseas sales                    98,059            74.1           184,758             79.0
Consolidated sales                     132,302          100.0            233,881           100.0
Notes:
1) National and regional categories are based on geographic proximity.
2) Countries included in each segment are as follows:
      1. The Americas: The United States and Canada
      2. Europe, Africa, & the Middle East: Holland, the United Kingdom, Italy, South Africa, and the United Arab Emirates
      3. Asia & Oceania: Indonesia, Australia, and New Zealand
      4. China: China
3) Overseas sales are sales in countries and areas other than Japan of the Company and its consolidated subsidiaries.


(6) Notes on Significant Fluctuations in Shareholder’s Equity: None

6. Other information: None




                  (English translation of “KESSAN TANSHIN” originally issued in the Japanese language)
                                                       16

								
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